MI SB0361

Amends the definition of "financial institution" in the Michigan Income Tax Act to clarify what entities are subject to taxation and how unitary business groups are treated

Modifies the tax base calculation for financial institutions from a 5-year average of equity capital to a single-year calculation based on total equity capital as of the close of the tax year, effective for tax years beginning after December 31, 2020

For tax years beginning on or before December 31, 2020, maintains the 5-year averaging method for calculating equity capital by adding equity capital from the current year and preceding 4 years, then dividing by 5

Allows deductions from the tax base for average daily book value of United States and Michigan obligations owned during the tax year, and limits deductions for equity capital of entities subject to other business taxes to 125% of minimum regulatory capitalization requirements

Clarifies treatment of financial institution combinations and identity changes by treating constituent institutions as a single entity for the entire tax year in which the change occurred and thereafter